The Hindu Business Line : Sangam India plans Rs 400-cr expansion

Mr L.L. Soni, Associate Vice-President, said the company wants to become an integrated textile house by 2007 — by then the expansion would be completed.

"Globally, polyester viscose yarn is in high demand, specially from trouser manufacturers. The cloth offers the same feel and look of poly wool fabric but at much lower prices. The fabric is also in high demand from defence forces globally," Mr Soni said.

In addition to ramping up spindles capacity, the company wants to add 100 additional weaving machines and set up a processing house, which will enable it to double its yarn and weaving capacity.

The expansion will be funded by bank loans up to Rs 300 crore (under textile upgradation scheme) and the balance by internal accruals and promoters' contribution. The company has also attracted investment from a venture capital fund.

Sangam India posted an 86 per cent rise in net profit to Rs 5.79 crore for the second quarter ended September 30, 2005, compared to Rs 3.11 crore in the corresponding period previous year. Net sales rose 30 per cent to Rs 82.28 crore (Rs 63.33 crore).

The company's exports now account for 20 per cent of the total sales, "we want to increase it to 30 per cent by 2008," Mr Soni said.

Out of the total sales of Rs 350 crore in the current year, the export sales is at Rs 70 crore.